Veitch Penny Solicitors

Labour only contractors who bore the lion’s share of responsibility for catastrophic water damage to a recently completed luxury block of flats will have to pay more than £3 million in compensation following a Court of Appeal decision.

The root cause of the flood was a single plastic nut which had been over-tightened using metal tools. That gave rise to a chain reaction in which water tanks suddenly emptied, causing a vacuum to develop, ultimately resulting in a ‘water hammer event’. Water had cascaded off balconies and down the sides of the building.

The owners of the property were obliged to deal with multiple claims by tenants and the cost of remedial works and other losses had been agreed at £4.75 million. A ‘cascade’ of litigation had ensued involving contractors, sub-contractors, sub-sub-contractors and even sub-sub-sub-contractors who had worked on the project.

Labour only electrical contractors, who stood right at the foot of the long contractual chain, were found liable by a judge to cover more than £3 million of the owners’ loss. The company raised a number of factual and legal issues in challenging that decision; however, all of its grounds of appeal were ultimately dismissed.